A good SWOT analysis should be an essential part of every project. Often called situational analysis, it helps to identify and evaluate the current internal situation of your company (Strengths and Weaknesses), as well as the external context (Opportunities and Threats) that could have an impact on your project.
However, companies often commit crucial SWOT analysis mistakes that could hinder their correct assessment. In this article, we will see which are the most common mistakes and how you can fix them in order to conduct a valuable analysis of your strategic planning.
If you want to learn more about SWOT and see some of the best SWOT Analysis examples, click here. And now, without further ado, let’s dive right into our topic!
Top 10 SWOT analysis mistakes
Conducting a comprehensive SWOT (Strengths, Weaknesses, Opportunities & Threats) analysis might not be as effective if you are committing some of the most common SWOT analysis mistakes:
1. Not being fully honest
As we mentioned previously, this situational analysis can help you determine the strengths and weaknesses of your company, as well as the opportunities and threats that external factors could have an impact on it. However, while strengths can be easy and fun to identify, assessing your weaknesses can be a lot more challenging.
Not only because it’s difficult to get honest with ourselves, but also because we are biased and not always able to see what we are doing worse than competitors. For this reason, it is important to be objective and not take your weaknesses personally.
Here are some ways in which you can get valuable feedback on what your company can improve:
- Go through your reviews on Google and other directories to get customer feedback;
- Ask you customers directly on what they think your biggest weakness is;
- Have a brainstorming session with your team to get aligned;
- Analyze your competitors unique selling propositions;
A Unique Selling Proposition, or a USP, is something that makes you stand out from other companies in the industry, something that you are doing better than them. By determining the unique selling propositions of your competitors, you will be able to see what you are lacking in a certain aspect that could be identified as a weakness.
2. Not completing a PESTLE analysis first
While it’s true that SWOT analysis already takes external factors into account, there is one exercise that you need to do before that if you really want to provide context to your situational assessment. Thus, second on our list of common SWOT analysis mistakes is not conducting a PESTLE analysis first.
A PESTLE analysis provides a more comprehensive overview of all the external factors that could influence an organization, including:
It considers a broad environmental context that can affect your company, and it is a great exercise to help with your strategic planning and position to respond to changes better than your competitors.
Once you’ve determined all the political, economical, sociological, etc. factors that can influence your decision making, these insights will help you tremendously with getting a better grip and understanding of your SWOT analysis.
SWOT and PESTLE analysis almost always go hand by hand, so don’t underestimate their combined power.
3. Writing lists that are too long
Probably one of the most common SWOT analysis mistakes that companies make is writing down lists that too detailed and long. While it’s great to have as many insights as possible, this mistake can prevent you from seeing the big picture and getting a clear view of your current situation.
Ideally, you should have no more than 4-5 points per section, summarized neatly and clearly.
Image source: asana.com
4. Getting too specific with your points
If these SWOT analysis mistakes weren’t enough, apart from having lists that are way too long and difficult to process, you can also make the mistake of getting way too specific with your points. While being specific in itself is good, it is possible to go overboard, and many companies are doing it.
For example, let’s say that you want to express the point of having “excellent customer support” in your Strengths section. You can either write it down like that directly, or maybe say something like “excellent customer support, 24/7 with live chat”, giving a few more details.
However, avoid going overboard by stating all of the good aspects of your customer support, like:
- Excellent customer support;
- Possibility to chat 24/7 with a representative;
- Our representatives respond in less than 10 minutes;
- Customer support in +10 languages.
Because this is not the point of the exercise. Your whole team already knows why your customer support is excellent, you don’t need to convince them. The point of a SWOT analysis is to give you a more generic, summarized overview of what is your current situation from every perspective, both internal and external.
5. Not having a clear goal
As we everything else in life, many companies and people lack a clear goal of why they are doing what they are doing. When you are working on a SWOT analysis, you should be aware of what is it that you are trying to achieve with it. After all, you are probably not doing it just because you are bored or for the sake of doing it.
Although the general goal of a SWOT analysis is to identify new opportunities for growing your business, you should also think about your specific goals other than that. Are you going to use it to handle potential threats because you’ve noticed something concerning? Are you planning to tackle your existing weaknesses?
Since you are going to dedicate quite some time on your analysis, it is important that you know how are you going to make use of all this extremely valuable information. Otherwise, you are committing one of the most common SWOT analysis mistakes.
6. Overestimating your strengths
Our list of common SWOT analysis mistakes that many companies make is the overestimation of their strengths. This section is typically the first to fill out, and also the easiest – because it gives us a good sense of doing our analysis right. However, quite often we tend to overestimate where we stand compared to our competitors.
Additionally, company employees can often have a hard time giving an unbiased opinion. For this reason, in order to do this step correctly, it is very important to have a good overview of our competitors – who they are, what they do, and what are their own strengths and weaknesses.
Here are some strategies that will help you outline your actual strengths without overestimating (or underestimating) yourself:
- Conduct a competitor analysis, writing down all the key points for each company;
- Identify the unique selling proposition of your competitors to see what are their strengths;
- Once you’ve identified their USPs, see how you compare for each aspect.
For example, you might be thinking that you offer an extremely fast food delivery service. This might be true, but then you analyze your competitors and find out that many of them have achieved even faster times.
This feature can still fall within your Strengths section, but now you have a more clear perspective on where you stand exactly. If you are only looking at yourself without any reference, it is easy to overestimate what your company is really good at.
7. Not focusing enough on Opportunities
Opportunities is the SWOT analysis category that marketers overlook. It is probably the most difficult section to fill out – it is not surprising that not giving it enough focus is among the biggest SWOT analysis mistakes that companies make. The reason why it’s so difficult is because it often requires a lot of additional analysis in order to fill it out correctly.
It is also one of the most important sections as it will be the key to helping you grow your business and increase your sales in the future. If you are able to detect opportunities that your competitors can’t, you might get a serious competitive advantage.
However, it is not easy to identify these opportunities, so make sure that you dedicate enough time and effort on this section of your SWOT analysis. If you don’t know where to start from, here are some strategies:
- Listen to your existing customers – what do they need that you don’t have yet?
- Listen to your leads & potential customers – what’s preventing them from converting?
- Look at industry trends & insights – what is currently changing around us?
- And of course, don’t forget to look at your competitors and what they are doing.
In the informational era, technology is often a huge source of opportunity – make sure that you pay close attention to it.
8. Not dedicating enough time
Next on our list of common SWOT analysis mistakes is not taking enough time to fill out each section carefully in the most valuable and insightful way possible. While a SWOT analysis is just a 2×2 grid with up to 5 points per section, and it doesn’t look like much, it does require a lot of analysis beforehand.
For this reason, it’s important to dedicate enough time on understanding and analyzing each section. If it took you just 5-10 minutes to fill out the whole grid, you are probably doing something wrong.
9. Relying on SWOT analysis alone
While a SWOT analysis can be very powerful for strategic planning, one of the common SWOT analysis mistakes that many companies make is only relying on this tool to make important business decisions. This should not be the case. You can combine it with other strategic planning tools, including:
- Porter’s Five Forces;
- VRIO Framework;
And more. You can check this article by Hubspot for more information.
10. Underestimating your competitors
We already talked a lot about competitors in the previous points, but it is also important to mention this as one of the biggest SWOT analysis mistakes that companies are making. While a SWOT analysis is about your business, it is extremely important to know where you stand within your market and industry.
As we mentioned previously, without a reference points, you will have a hard time assessing your actual situation in terms of Strengths, Weaknesses, Opportunities and Threats. So, make sure that you always dedicate enough time on your competitors as well.
And that was all from me for today! Thank you for reading my article on common SWOT analysis mistakes, and I hope to see you in the next one! In the meantime, if you have any questions, do not hesitate to let me know in the comments below.